Park Hall School v Overend

• Jurisdiction: Ireland
• Judge: O'Hanlon J.
• Judgment Date: 01 January 1987
• Neutral Citation: 1986 WJSC-HC 1500
• Docket Number: [1983 No. 4963P]
• Court: High Court
• Date: 01 January 1987

1986 WJSC-HC 1500

THE HIGH COURT

No.4963 P/1983

PARK HALL SCHOOL LTD v. OVEREND

BETWEEN/

PARK HALL SCHOOL LIMITED

Plaintiff

-and-

GEORGE G. OVEREND & OTHERS Practising under the style of "A. & L. Goodbody"

Defendants

Citations:

ARNOLD V VEALE UNREP COSTELLO 28.02.77 1977/1/56

BUCKLEY JF ASPECTS OF THE LANDLORD & TENANT (AMDT) BILL 1979 1979 GILS 115

CARTHY V O'NEILL 1981 ILRM 443

CASEY V IRISH INTERCONTINENTAL BANK & ORS 1979 IR 364, 114 ILTR 18

DUNLOP V WOLLAHRA MUNICIPAL COUNCIL 1981 1 AER 1202, 1982 AC 158, 1981 2 WLR 693

FINLAY V MURTAGH 1979 IR 249

FLETCHER V JUBB, BOOTH & HELLIWELL 1920 1 KB 275

GRIFFITHS V YOUNG 1970 CH 675

GUARDIAN BUILDERS LTD V PATRICK KELLY & PARK AVENUE LTD 1981 ILRM 127

KELLY V CROWLEY 1985 IR 212

KELLY V PARK HALL SCHOOL 1979 IR 340, 113 ILTR 9

LAW V JONES 1974 CH 112, 1972 2 WLR 994

LAW V ROBERTS 1964 IR 292

MIDLAND BANK V STAMPS 1979 CH 384

MULHALL V HAREN 1981 IR 364

ROCHE V PEILOW 1985 IR 232, 1986 ILRM 189

ROSSITER V MILLER 3 AC 1124

STATUTE OF FRAUDS 1677

TAYLOR V RYAN & ORS UNREP FINLAY 10.03.83 1983/12/3596

TIVERTON LTD V WEARWELL LTD 1975 CH 146

VON HATZFELDT-WILDENBURG V ALEXANDER 1912 1 CH 284

Synopsis:

NEGLIGENCE

Solicitor

Sale of land - Client vendor - Sale subject to contract - Legal effect uncertain - Oral agreement for sale of plaintiffs" land - Agreement negotiated by plaintiffs" auctioneer - Letter of 19/12/77 written by auctioneer recorded particulars of agreement - Letter stated:- "I confirm that we have agreed terms, subject to contract, for the sale of these lands to Mr. Paddy Kelly ... The principle terms to be included in the contract for sale are as follows ..." - The defendants were the solicitors acting for the plaintiffs in the transaction - The defendants purported to insert a further term requiring the purchaser (Kelly) to execute a written contract within seven days - Having failed to comply with that requirement, the documents held by Kelly were returned by him to the defendants without objection and without any suggestion that an enforceable agreement between Kelly and the plaintiffs had been made - The defendants then advertised, on behalf of the plaintiffs, the land for sale by tender - Shortly afterwards, and before any tenders had been received, Kelly instituted without warning an action against the plaintiffs in the High Court and claimed specific performance by the plaintiffs of the oral agreement for sale of the land - The defendants immediately sought the advice of counsel and thereafter acted on that advice - The High Court and, on appeal, the Supreme Court held in ~Kelly v. Park Hall School~ [1979] I.R. 340 that the letter of 19/12/77 was a sufficient memorandum of the oral agreement and that the agreement should be specifically performed by the plaintiffs, notwithstanding the inclusion of the phrase "subject to contract" - The plaintiffs, who had decided to sell the land in order to relieve their acute financial difficulties, incurred substantial debts in defending unsuccessfully the Kelly action - Pending the hearing of that action, the plaintiffs, in the belief that the Kelly claim was unfounded, accepted the highest tender for the purchase of the land but, being unable to make title, they were compelled to compromise for a substantial sum an action brought by the tenderer against them for damages - Counsel's advice was that the Kelly action should be defended but counsel expressed reservations about the likely outcome of that action and of an appeal from an adverse judgment - Held, in giving judgment for the defendants, that when the defendants became aware of the letter of 19/12/77 they ought to have realised that there was a possibility that the plaintiffs had already become bound by an enforceable agreement for the sale of their land to Kelly but that, nevertheless, the defendants had not been negligent or in breach of contract in forwarding a draft contract to Kelly's solicitors for execution by Kelly - Held that, as Kelly had returned the documents of title without objection and without seeking to enforce the oral agreement, it was reasonable for the defendants to put the land on the market, and that they had not been negligent or in breach of contract in doing so - Held that, until there had been some indication that Kelly intended to enforce the oral agreement, the defendants were not bound to inform the plaintiffs of the possibility that he might do so - Held that, when Kelly instituted his action on 28/4/77, it was the duty of the defendants to seek the advice of counsel in the matter, and they had done so - Held that the plaintiffs had been aware of the advice of counsel at all times, and of the reservations expressed by counsel - (1983/4963 P - O'Hanlon J. - 3/12/86) - [1987] IR 1 [1987] ILRM 345

|Park Hall School v. Overend & others|

PROFESSIONS

Solicitor

Sale of land - Vendor client - Sale subject to contract - Legal effect uncertain - Oral agreement for sale of plaintiffs" land - Sale apparently abandoned by purchaser - Documents of title returned to defendants, who were plaintiffs" solicitors - Land placed on market by defendants - Subsequent successful action instituted by original purchaser for specific performance by plaintiffs of oral agreement - Plaintiffs claimed damages from defendants for their alleged negligence and breach of contract - Judgment for defendants - ~See~ Negligence, solicitor - (1983/4963 P - O'Hanlon J. - 3/12/86) - [1987] ILRM 345 [1987] IR 1

|Park Hall School v. Overend & others|

1 Judgment delivered on the 3rd day of December, 1986, by O'Hanlon J.

2 I have to deal at this stage with an application made on behalf of the Defendants at the conclusion of the Plaintiff's case, to dimiss the present action which is one wherein the Plaintiff claims damages against the Defendants for professional negligence and breach of contract when acting in their capacity as solicitors for the Plaintiff in the years 1977 and 1978.

3 The particular transaction in respect of which the Defendants were engaged to act as solicitors for the Plaintiff concerned the proposed sale of certain lands the property of the Plaintiff situate at Monkstown, Co. Dublin. Other adjoining lands had been sold some time previously by the Plaintiff to a Mr. Patrick Kelly, Builder, or to his company, Berkeley Homes Limited, and towards the end of the year 1977 Mr. Whittaker of Messrs. Lisney and Son, Auctioneers, negotiated on behalf of the Plaintiff with Mr. Kelly for the sale to him of the remaining lands, which formerly comprised the grounds of the Hall School.

4 At that time the Plaintiff was under considerable financial pressure from its bankers to clear off a very substantial debt which was owing to the bank and hoped to relieve this pressure by an early sale of the Monkstown lands which were still retained by it. At the same time, however, the Plaintiff's Architects, Messers. McDonnell and Dixon, were applying on behalf of the Plaintiff for planning permission to develop the said lands for residential housing, as it was apparent to all concerned that such permission, if it could be procured, would considerably enhance the value of the lands for sale purposes. And concurrently with these developments the Plaintiff was discussing a transfer of its bank account and indebtedness to a new bank which was prepared to allow the Plaintiff more time and room for manouevre in discharging its liabilities.

5 Before a final decision was taken on either of these matters - the planning application, and the application for new banking facilities - the negotiations for the sale of the lands at Monkstown came to a head, when Mr. Whittaker communicated to the Plaintiff in early-December, 1977, an offer of £175,000 which Mr. Kelly was prepared to make. The Board of the School considered the offer on the 7th December, 1977, and was disposed to accept it, but before doing so it sought the advice of Mr. Michael Lucey, Property Investment Manager of the Irish Life Assurance Company as to the advisability of selling immediately at that price rather than awaiting the outcome of the application for planning permission. Mr. R.P. Willis, a member of the School Board who was then Managing Director of Irish Life, communicated this request for advice to Mr. Lucey on the 8th December, 1977, and Mr. Lucey took the view that a quick sale might be justified if it put money in the Plaintiff's pocket without delay. This decision must have been communicated to Mr. Whittaker, as he proceeded to complete his negotiations with Mr. Kelly, and wrote to Mr. Lucey in the following terms on the 19th December, 1977:

"Dear Michael,

Hall School - Lands at rere

Further to our telephone conversation this morning I confirm that we have agreed terms, subject to contract, for the sale of these lands to Mr. Paddy Kelly or Berkeley Homes Ltd. who were the purchasers of the front lands. The principal terms to be included in the contract for sale are as follows:-

Proposed Purchaser: Hickey Beauchamp Kirwan &, O'Reilly (In Trust)

Proposed Price: £175,000

A non-refundable deposit of £30,000 to be paid on exchange of contracts, the balance to be paid not later than 6 months thereafter with interest at 12% from the contract date until the closing date.

I am sending a copy of this letter to Mr. Haugh of A. & L. Goodbody and perhaps you could kindly confirm instructions to him on behalf of your Committee.

Yours sincerely

H. Whittaker."

6 Mr. Lucey, who was authorised to represent the Board in connection with the sale and to give instructions to Mr. Whittaker, then proceeded to notify the Plaintiff's Solicitors, (the Defendants herein), and the Plaintiff's Architects, about the arrangement which had been made. To Mr. Haugh of the Defendant firm, he wrote as follows on the 22nd December, 1977:

"Re Park Hall School Limited Sale of Lands at Rere

Dear Mr...